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Property News Weekly Digest
2019/8/10
〈The Standard, August 10, 2019〉Swire Properties (1972) said the protests in Hong Kong have had some effect on retail sales at their shopping malls and hotel and sales are likely to continue to be affected if the situation continues.

Merlin Bingham Swire, chairman of Swire Pacific (0019) and Swire Properties, said he felt sad and worried about the current situation in Hong Kong. The company is dedicated to maintaining normal business operations and minimizing the impact of interruptions on customers.

The property developer yesterday said its first-half underlying net profit surged 1.99 times year on year to HK$18.61 billion, excluding changes in the valuation of investment properties.

The growth reflected the profit arising from the sale of interests in two office buildings in Taikoo Shing and in other investment properties in Hong Kong.

However, first-half retail sales decreased by 4 percent at The Mall, Pacific Place, against a background of global trade uncertainties and with lower spending by tourists, particularly from the mainland.

Trading conditions for the managed hotels in Hong Kong were difficult in the first half, the company said. Revenue per available room and occupancy were lower.

It declared a first interim dividend of HK$0.29 per share. Net profit fell 57.68 percent to HK$8.97 billion. Basic earnings per share were HK$1.53.

Yesterday, Swire Pacific posted its recurring underlying profit, excluding changes in the valuation of investment properties and the associated deferred tax impact, grew by 40 percent year on year to HK$4.23 billion for the first half - helped by property and aviation divisions.

〈Asian Post, August 9, 2019〉The Lands Department said yesterday it was doubling the deposit for government sites put up for tender to as much as HK$50 million after a buyer walked away from a winning bid of HK$11.1 billion for a plot of land in June.

The rule is effective immediately and the deposit would apply to all land sales with an estimated value of HK$400 million or more.

The tender for the abandoned Kai Tak plot, which reopens today, will be the first that requires the new higher deposit as it is worth more than HK$400 million.

The successful bidder will also be required to make a part payment amounting to 10 per cent of the winning bid minus the initial deposit within seven working days of being awarded the tender.

The balance must be paid within 28 days. Under the previous arrangement, the maximum initial deposit was HK$25 million and the winning bidder was only required to make a lump sum payment within 28 days.

"The two new measures taken together will increase the cost of default by the successful tenderer, strengthening the deterrent effect and better protecting the government's interest in the event of such a default," the department said.

But Vincent Cheung, managing director of Vincorn Consulting and Appraisal, said the government should follow the MTR Corp and the Urban Renewal Authority in requiring a guarantor so as to prevent a winning bidder from reneging on a sale.

〈China Daily, August 8, 2019〉Hong Kong investors are seeking trade and investment opportunities in Kenya, the Chinese port city's officials said on Tuesday.

Daniel Lam, a regional director of Hong Kong Trade Development Council, told a trade forum in Nairobi that Kenya has enormous markets with buoyant growth, especially with the boost given by the Belt and Road Initiative (BRI).

Lam said delegates of ten Hong Kong enterprises were here to scout for trade and investment opportunities through joint ventures with local companies in banking, finance, manufacturing, real estate development, property development, construction, engineering services and project investment.

The delegation was keen to know more about Kenya's economic success underpinned by the BRI, in which the country plays a part "through key projects such as the ongoing modernization of the Mombasa port and the construction of the Standard Gauge Railway," said Lam.

The BRI aims to connect markets across several continents including Asia, Africa and Europe, furthering market integration and creating a regional economic cooperation framework that can benefit all.

Lam said it is clear that there is no better way for Kenya to capture relevant opportunities than through Hong Kong.

"Hong Kong is playing a pivotal role in the BRI, serving as a center for financing, investment, logistics, trading, infrastructure and a whole range of professional services," he added.

〈Asian Post, August 7, 2019〉Price growth across the world's leading prime city housing markets has continued to slow during the first half of 2019, rising by just 0.4%, taking the annual growth to 0.7%.This compares to a 5.1% YoY increase in the year to June2018.

All six cities tracked in Greater China recorded solid growth, with Hong Kong topping the table as the world's most expensive housing market, and Beijing experiencing the biggest gain in property prices (up 2.9% in 1H) in Asia.

"There are a number of reasons why the prime residential markets in global cities are seeing a slowdown, with government policy, the cost of money, increased supply and global economic uncertainty all playing their part," said Sophie Chick, head of Savills World Research.

"Despite this, we do not expect significant price falls across the index, but that growth will remain flat or experience small increases in value in the medium term," she added.

Latest data from Savills World Cities Prime Residential Index shows that Berlin and Paris have seen stand out, with prime residential property growing ~4% over the last six months and 8% over the last year. Both markets have low supply levels coupled with increasing demand from domestic and international buyers.

〈China Daily, August 6, 2019〉Billion Development and Project Management yesterday priced the first batch of flats at its Tsuen Wan project at discounts of up to 10 per cent compared to the district's prevailing rate, a sign that the unrest in Hong Kong is having an impact on property prices.

The developer unveiled the first batch of 238 flats at the 840-unit The Aurora in the western New Territories, pricing them at an average of HK$17,740 per square foot after factoring in the discounts.

The flats range from 217 sq ft to 859 sq ft, and the smallest is priced at HK$3.81 million, or HK$17,558 per square foot.

"The price of the newly released flats is lower than some of the second-hand flats nearby, like Chelsea Court and Vision City," said Sammy Po Siu-ming, chief executive of Midland Realty's residential division.

"There haven't been any new flats released for less than HK$4 million in Tsuen Wan in recent years."

A 598 sq ft unit at the 12-year-old Vision City next to The Aurora recently sold for HK$9.9 million, or HK$19,488 per square foot.

The new flats, the cheapest in the district for a decade, were about 10 per cent lower than the price of lived-in homes in the area, according to Louis Chan, vice-chairman of Asia-Pacific and chief executive of the residential division at Centaline Property Agency.